Can RIM Make the BlackBerry Cool?

By Quentin Fottrell

If BlackBerry-maker Research in Motion wants to win back thumbs, analysts say the company needs to find ways to appeal to younger, hipper consumers.

The company, which swung to a fiscal fourth quarter loss Thursday, has steadily lost ground to the iPhone and Android handsets, experts say. Several recent studies showed the gadget formerly known as the “Crackberry” is now mostly popular with older, white-collar consumers who earn $75,000 or more. BlackBerry customers are more likely to be 55-64 years of age, according to market ComScore. Only 15% of Smartphone customers aged 25-34 have a BlackBerry, according to Nielsen data, while 20% of those aged 34-44 use the device. However, some 22% of Smartphone users aged 45-64 use a BlackBerry. “RIM needs to find a way to attract the high school, college, post-college crowd,” says investment blogger Andy Nyquist. “Growing old with professional baby boomers is a slow-dying recipe.”

As each day passes before the launch of the long-awaited and much-delayed BlackBerry 10, tech pros say RIM loses out on younger Smartphone users. “The BlackBerry 10 launch is so far away and there is so little evidence to create confidence that they will hit a home run,” says Michael Holt, senior analyst with Morningstar. “It’s way behind the competition.” Holt expects it to land in late 2012. Scott Sutherland, senior analyst at Wedbush Securities, says the BlackBerry will needs to have a stronger relationship with app developers. BlackBerry only has around 60,000 apps versus the 500,000-plus apps available for Android and iPhone.

Others say the company can start its reinvention by making a splash with a bold, new advertising campaign that will go viral on social networking sites or at least grab younger people’s attention. Nyquist says the latest campaign featuring a young man who uses his BlackBerry Playbook to propose to his girlfriend doesn’t capture that carefree teenage spirit. “It makes you think of life that lies ahead, getting mortgage, having children and growing older,” he says. “It almost seems like RIM management is afraid that if it changes its message now, it will confuse existing customers.” (RIM declined to comment.)

The sheer number of BlackBerry phones on the market has also resulted in the brand developing a split personality, experts say – something the company may be addressing. Some models even have a dual combination of mini-keyboards and touch-screen, which falls halfway between the older or younger crowd, Nyquist says. “This suggests RIM is not going to have another one-hit wonder that brings the company back to its glory days 10 years ago,” he says. Sutherland says it’s time the company stopped trying to tweak and perfect the BlackBerry 10, and instead focus on the bigger picture by making phones with “cool apps and an easy-to-use interface.”

To be sure, BlackBerry’s reinvention has been slowed as it grapples with major corporate upheavals, Sutherland says. In January, RIM bowed to pressure from investors by appointing Thorsten Heins, the company’s former co-chief operating officer, as CEO. And in October 2011, a network outage cut the service of millions of people around the globe. Its stock has tumbled by 76% over the last 12 months and the company was left with a glut of unsold PlayBooks, a tablet originally planned as a rival to Apple’s iPad.